Could You Pay Your Mortgage on One Income? Here’s What to Know

(StatePoint) For many people, getting married and buying a house is still part of the American Dream. That’s reflected in the numbers. The homeownership rate among married couples in the U.S. is 80 percent, according to recent data reported by Statista. But what if something were to happen to you or your spouse? Would the person left behind still be able to afford the mortgage?

In today’s world of dual-income families, the answer could easily be “no,” which would make a sad situation even worse. Not only could a family lose their home, but a disruptive move could also mean that children would have to change schools and leave friends behind.

One way to protect against this scenario is with a life insurance policy, which can be used to pay off a mortgage so that the surviving spouse and family members can enjoy the home they love and have stability at a critical time in their lives.

There are generally two types of life insurance: permanent life insurance and term life insurance. Both provide financial resources to help take care of loved ones, but there are some important differences to consider.

Permanent life insurance can last for a person’s entire life. Term life insurance, by contrast, is offered for a limited period of time, such as 10-, 20- or 30-year periods. It’s generally more affordable and you can choose the duration based on your circumstances. For example, if you still have 20 years left to pay on your mortgage, you might want to purchase a 20-year plan, so you know your family would be able to keep making payments, or even pay off the house early, in the event that something happened to you.

The death benefit from both permanent and term life insurance can also provide help for expenses related to maintaining the home, as well as other daily living expenses like food, medical care, utilities, car payments or even a child’s future college tuition.

“People often think about getting life insurance after they buy a house, because they wouldn’t want their family to risk losing their home if something were to happen to them,” said Lou Colaizzo, senior vice president of Life, Erie Insurance. “But life insurance can provide even more than that. It can help replace a spouse’s lost income -- essentially, it can protect the family’s standard of living.”

Colaizzo says the amount of life insurance needed depends on several factors, including a person’s salary and the number of years to retirement. Experts recommend talking with an insurance agent to ensure you have the right coverage based on your individual circumstances and to make sure your family -- and their ability to keep their home -- are protected.